After Hong Kong opened up to crypto markets, several operators are obtaining licenses to operate there, including SEBA Bank.
Hong Kong is for all intents and purposes part of China, although it is considered a special territory with autonomous laws.
Until recently, China’s attitude toward cryptocurrencies was one of total prohibition, but for some time now it has begun to open up, starting with Hong Kong.
Crypto news: SEBA Bank lands in Hong Kong
SEBA Bank is a Swiss bank, established only in 2019 in Zug with the aim of revolutionizing the banking system.
It is a bank that specializes in crypto services, yet operates in the traditional financial sector.
Switzerland is Europe’s most important crypto hub, and many Swiss banks actually operate in the rest of the world as well, even outside continental borders.
As Reuters reports, SEBA Bank today said it has received approval from Hong Kong’s Securities and Futures Commission (SFC) financial markets regulator, thanks to which it will be able to offer services on virtual assets in the Asian financial center’s territory.
Once the conditions for final approval are met, the SEBA bank will receive licenses from the SFC to operate, offering securities trading, structured products related to cryptocurrencies, advisory and management of digital assets and traditional securities.
Hong Kong is the third market in which the bank has applied for a license, after Switzerland and the United Arab Emirates (UAE).
Hong Kong crypto hub attracts SEBA bank
In reality, the Chinese ban regarding the exchange of digital assets mainly affects retail investors, not financial professionals.
But retailers are the real players in crypto markets, without whom such markets would be irrelevant.
The June opening does affect retail investors, although it is limited to Hong Kong residents. However, it is hard to imagine that it will not be extended to mainland China as well, should this experiment prove successful.
At first, China had actually allowed it to go ahead, only to pivot and attempt to eradicate crypto trading and mining.
That attempt at eradication failed miserably, as even after the ban several Chinese continued, or resumed, cryptocurrency trading, using foreign exchanges, or even mining Bitcoin.
At that point, the choice was obvious, which was to change approach and try to make crypto trading and mining legal while forcing operators to comply with a strict and specific regulatory framework.
Hence the choice to allow activity only to operators who apply for and obtain regular licenses.
Just yesterday news came out that the first duly licensed crypto exchange has opened legal crypto trading to retail investors residing from Hong Kong as well.
SEBA is but one of many financial operators who want to enter the Chinese crypto market, and they are doing so through the only place in the country where it is legal, for now.
SEBA Hong Kong CEO Amy Yu said Hong Kong offers huge potential, thanks to the new regulatory framework specifically on virtual assets, and the city’s legal system.
According to Yu, Hong Kong is well positioned to tap into the Chinese market as well, when it too is opened to retail crypto trading.
He said:
“Hong Kong may once again serve as a gateway to China, delivering the significant potential of cryptocurrencies and blockchain technology.”
China’s goals
China has the potential to become the world’s largest crypto market, surpassing even the US market. However, for now it plays a secondary role, although not without power.
Indeed, there actually still exists a Chinese crypto market, except that it is difficult to analyze since it is forced to use foreign exchanges, largely hidden from the authorities.
The moment crypto trading were to be legalized, it could attract many millions of new investors or speculators, and thus also big money overall.
However, the question is whether such investors will be shrewd, or whether they will simply be enticed by the prospect of quick and easy gains, only to flee at the first bear market.
This is precisely why the Chinese authorities have opted for a rather rigid approach, based on serious operators forced to apply for special licenses that are not easy to obtain.
Should this path proceed without major hiccups, the next bullrun could be gigantic again.